Eaton (ETN) Stock Forecast & Price Target

Eaton Corp is experiencing robust organic sales growth, projected at 5.5%-7.5% year-over-year, with expectations for further acceleration in 1H25 and 2H25, driven by increased volume from new capacity and a recovery in European markets. The company is poised for improved profitability, with a forecasted segment operating margin rising to approximately 28%, reflecting a 350-450 basis point increase from 2024 due to a favorable mix and the successful execution of significant project backlogs. Notably, Eaton's datacenter business has demonstrated remarkable resilience and growth, achieving a 45% year-over-year increase, largely fueled by demand from hyperscalers, and anticipates further strong performance continuing into 2025.

Eaton Corp's outlook has been negatively impacted by a notable decline in its Vehicle segment sales, which fell by 7% compared to earlier estimates, while expectations for a decline in the Residential segment have also emerged. The eMobility business has experienced a 10% decline against projections, raising concerns about overall revenue performance. Additionally, the company faces potential disappointment in its data center opportunity due to the risk of normalizing order rates, compounded by external factors such as Hurricane Helene and labor strikes in the aerospace industry that contributed to a sales headwind.